Europe stocks gain as banks, commodity rise

Europe stocks gain as banks, commodity rise
Comment E-mail Print Share
First Published: Fri, Jun 19 2009. 05 01 PM IST
Updated: Fri, Jun 19 2009. 05 01 PM IST
London: European shares were higher on Friday at midday, led by gains in banks and commodity stocks, as “triple witching” started to take place.
By 4:00pm, the pan-European FTSEurofirst 300 index of top shares was up 1.3% at 861.70 points.
The European benchmark index is up 33% from the lifetime low hit on 9 March, as investors have become more confident on prospects for an economic recovery.
“It is a pretty quiet day today, it is all about triple witching. Everyone is waiting to see what happens with Volkswagen as Porsche options mature today. No one knows whether they will be rolled over or let expired which means VW could fall off a cliff,” said Heino Ruland, strategist at Ruland Research.
Triple witching is the expiry of stock index futures, stock index options and single stock options.
Banks added the most points to the index. HSBC, Barclays, Standard Chartered and Banco Santander were up 1.7-3%.
The DJ Stoxx banking index is up around 21% for the year, after falling about 64% last year.
Insurers were higher, boosted by a positive sector note from Deutsche Bank. The broker upgraded price targets for Aviva and Axa which gained 5.6 percent and 0.9 percent, respectively.
Energy stocks were higher as crude rose towards $72 a barrel. BG Group, BP, Royal Dutch Shell and Total gained 1-4.1%.
Automobile stocks in the doldrums
Miners also ticked up. Anglo American, Antofagasta, BHP Billiton, Eurasian Natural Resources Corporation, Rio Tinto and Xstrata were 0.5-3.9% higher.
Investors also stuck with defensive stocks with food producer Nestle up 1.9%, while drug maker AstraZeneca gained 2.4% after UBS added the group to its UK “First XI” stock list.
There were few sectors trading in the red with auto stocks the main sector in the doldrums. Porsche slipped 0.3% after it said pretax profit at its core sports car business declined on the back of a sharp drop in vehicle sales and revenue in the first nine months of its fiscal year.
Volkswagen was down 1.8% as investors waited to see what was happening with the Porsche options.
US shares rallied on Thursday, breaking a three-day losing streak, as data on the job market, regional manufacturing and an index of leading indicators revived hopes the recession-hit economy was stabilising.
Comment E-mail Print Share
First Published: Fri, Jun 19 2009. 05 01 PM IST
More Topics: Markets | Europe | Stocks | Asia | Commodities |